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A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Monday, July 11, 2022. Asian shares were mostly lower on Monday, although Japan's benchmark rallied, welcoming a landslide parliamentary election victory by the ruling Liberal Democratic Party.
A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Monday, July 11, 2022. Asian shares were mostly lower on Monday, although Japan's benchmark rallied, welcoming a landslide parliamentary election victory by the ruling Liberal Democratic Party.
A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Monday, July 11, 2022. Asian shares were mostly lower on Monday, although Japan's benchmark rallied, welcoming a landslide parliamentary election victory by the ruling Liberal Democratic Party.
Pedestrians walk past the New York Stock Exchange, Friday, July 8, 2022, in New York. Stocks are swinging between small gains and losses as Wall Street works out what to make of surprisingly strong data on the U.S. jobs market released Friday.
FILE - Traders work on the floor at the New York Stock Exchange in New York, July 1, 2022. Stocks are opening lower on Wall Street as markets turn cautious ahead of earnings reports from big U.S. companies starting this week and more reports that will show how badly inflation is hitting American businesses and households. The S&P 500 fell 1.1% in the early going Monday, July 11, 2022 while drops in technology stocks helped send the Nasdaq composite down 2%.
A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains.
A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains.
A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains.
A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Monday, July 11, 2022. Asian shares were mostly lower on Monday, although Japan's benchmark rallied, welcoming a landslide parliamentary election victory by the ruling Liberal Democratic Party.
A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Monday, July 11, 2022. Asian shares were mostly lower on Monday, although Japan's benchmark rallied, welcoming a landslide parliamentary election victory by the ruling Liberal Democratic Party.
A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Monday, July 11, 2022. Asian shares were mostly lower on Monday, although Japan's benchmark rallied, welcoming a landslide parliamentary election victory by the ruling Liberal Democratic Party.
Pedestrians walk past the New York Stock Exchange, Friday, July 8, 2022, in New York. Stocks are swinging between small gains and losses as Wall Street works out what to make of surprisingly strong data on the U.S. jobs market released Friday.
FILE - Traders work on the floor at the New York Stock Exchange in New York, July 1, 2022. Stocks are opening lower on Wall Street as markets turn cautious ahead of earnings reports from big U.S. companies starting this week and more reports that will show how badly inflation is hitting American businesses and households. The S&P 500 fell 1.1% in the early going Monday, July 11, 2022 while drops in technology stocks helped send the Nasdaq composite down 2%.
A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains.
A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains.
A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 12, 2022. Asian shares fell Tuesday after a slump on Wall Street erased recent gains.
TOKYO (AP) — Asian shares fell Tuesday after a slump on Wall Street erased recent gains. U.S. futures and oil prices also declined.
Investors are on the lookout this week for updates on inflation and corporate profits, while renewed coronavirus outbreaks are adding to jitters.
The euro cost $1.0025, down from $1.0042, having dipped as low as $1.0007. The U.S. dollar inched down to 137.13 Japanese yen from 137.47 yen.
Both currencies have been trading at 20-year lows as the dollar has surged along with U.S. interest rates, which promise higher returns for investors.
The European common currency is close to dropping below parity, or one-to-one with the dollar. The last time the euro was below $1 was on July 15, 2002.
In share trading, Japan’s benchmark Nikkei dropped 1.8% in morning trading to 26,340.48. Australia’s S&P/ASX 200 gained 0.3% to 6,621.00. South Korea’s Kospi slipped 1.2% to 2,311.56.
Hong Kong’s Hang Seng sank 1.5% to 20,820.59, while the Shanghai Composite index shed 1% to 3,281.25 on growing concerns over COVID-19.
Adding to the pessimism, Hong Kong authorities announced they are considering implementing an electronic health code system to restrict movements of people infected with COVID-19, as well as overseas arrivals, a system similar to what's already in place in mainland China.
The highest inflation in four decades is pushing the Federal Reserve and other central banks to hike interest rates, which puts the clamps on the economy and hurts various types of investments.
On Wall Street, the S&P 500 dropped 1.2% to 3,854.43, giving up most gains from the previous week. The Dow Industrial Average dipped 0.5% to 31,173.84, while the Nasdaq composite fell 2.3% to 11,372.60.
Stocks of smaller companies were some of the biggest losers, with the Russell 2000 index down 2.1%, as worries about a possible recession continued to dog markets.
An outbreak of COVID infections is forcing casinos in the Asian gambling center of Macao, near Hong Kong, to shut for at least a week. That sent Wynn Resorts and Las Vegas Sands down more than 6% apiece for some of the larger losses in the S&P 500.
Twitter lost even more, 11.3%, in the first trading after billionaire Elon Musk said he wants out of his deal to buy the social media platform for $44 billion. Twitter said it will take Musk to court to uphold the agreement.
Other big technology companies were also particularly weak.
In the bond market, a warning signal continued to flash about a possible recession. The yield on the 10-year Treasury slid to 2.98% from 3.09% late Friday as investors moved dollars into investments seen as holding up better in a downturn. It remains below the two-year Treasury yield, which fell to 3.07%.
Some investors see that as a sign that a recession may hit in the next year or two. Other warning signals in the bond market that some see as more reliable, which focus on shorter-term yields, still aren't flashing. But they also are showing less optimism.
Companies this week are set to begin reporting how their profits fared during the spring. Big banks and other financial companies dominate the early part of the schedule, with JPMorgan Chase and Morgan Stanley set for Thursday. BlackRock, Citigroup and Wells Fargo are among those reporting on Friday.
Expectations for second-quarter results seem to be low. Analysts are forecasting 4.3% growth for companies across the S&P 500, which would be the weakest since the end of 2020, according to FactSet.
Even if companies end up reporting better results than expected, which is usually the case, analysts say the heavier focus will be on what CEOs say about their profit trends for later in the year.
The roughly 19% drop for the S&P 500 this year has been due entirely to rising interest rates and changes in how much investors are willing to pay for each $1 of a company’s profit. So far, expectations for corporate profits have not come down much. If they do, that pull stocks still lower.
The recent rise of the U.S. dollar against other currencies has added another challenge to companies already contending with high inflation and potentially weakening demand, according to Michael Wilson, equity strategist at Morgan Stanley.
One euro is worth close to $1 now, down 15% from a year earlier, for example. The Japanese yen is also at a 20-year low. That means sales made in euros or yen are worth fewer dollars than before.
“The main point for equity investors is that this dollar strength is just another reason to think earnings revisions are coming down over the next few earnings seasons,” Wilson wrote in a report.
Beyond earnings updates, reports this week on inflation will likely dominate trading. On Wednesday, economists expect a report to show that inflation at the consumer level accelerated again last month, up to 8.8% from 8.6% in May.
In energy trading, benchmark U.S. crude fell $1.60 to $102.49 a barrel. It lost 70 cents to $104.09 a barrel on Monday.
Brent crude, the international standard for pricing, lost $1.56 to $105.54 a barrel.
AP Business Writers Damian J. Troise and Stan Choe contributed.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Saturday, 2 p.m., memorial service at the Destiny Outreach Ministries in North Tazewell, Va.
Saturday, 2 p.m., at the Covenant Presbyterian Church in Claypool Hill, Va.
Saturday, 1 p.m., memorial service at Crossroads Church in Bluefield.
William (Bill) Orrin Slade, of Princeton, a proud veteran of the United States Army, passed away peacefully at home on August 3rd, 2022. The son of the late Ralph and Pansy Slade, Bill graduated from Elkhorn High School in 1953, Bluefield College in 1958 and received an Electrical Engineerin…
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